The latest monthly report on apartment rents in the United States shows that after six months of decline, the national rent index rebounded by 0.3% in February, with the median rent in the U.S. standing at $1,375. Among the top 100 cities, 75 saw monthly rent increases in February, while 58 cities experienced annual rent increases. Los Angeles witnessed a monthly rent increase of 0.7%, more than double the national average increase.
According to a report released by the rental website “Apartment List” on the 2nd of this month, several cities in California ranked at the top in terms of vacancy rates, median overall rent, and median rent rankings among the top 100 cities in the U.S. Irvine ($3,042), San Jose ($2,797), San Francisco ($2,782), and Fremont ($2,676) ranked 1st to 4th respectively. San Diego ($2,291) and Los Angeles ($2,077) ranked 12th and 15th respectively.
In February, the city with the largest monthly rent increase in the U.S. was Fresno in Central California (1.8%). Riverside in Southern California ranked 4th with a 1.4% increase; San Francisco ranked 14th with a 0.9% increase; Anaheim in Orange County and Los Angeles ranked 16th and 26th respectively, with increases of 0.9% and 0.7%. Detroit ranked 100th with a 1.2% rent decrease.
Currently, the median rent for a one-bedroom apartment in Los Angeles is $1,858, while a two-bedroom apartment’s median rent is $2,369. In the overall rental market, the median rent is $2,077, ranking 15th nationwide. Compared to the national average, Los Angeles’ median rent is 51.1% higher. Looking at the entire Los Angeles metro area, the median rent is $2,189, 5.1% lower than in the city of Los Angeles.
In the Los Angeles metro area, Newport Beach was the most expensive city in February with a median rent of $3,272, while Long Beach was the most affordable at $1,729. Pomona saw the fastest rent increase at 4.9%, while Long Beach experienced a slight decrease (-2.3%).
Due to fires, cities closest to the fire zones in Los Angeles County saw rent increases exceeding the metro area’s average. Santa Monica, closest to the Palisades fire, saw the largest increase of 3% since the beginning of the year. Pasadena, near the Eaton fire zone, saw a 2% rent increase, while Glendale and Burbank nearby also experienced similar increases (2.1% and 1.9%). Despite some cities experiencing rent increases, the momentum was dampened by California’s rent control policies, yet the impact of fires on rent trajectories is evident.
According to U.S. Census data, 63% of residents in Los Angeles rent their homes, with nearly half paying more than 30% of their monthly income in rent.
“Apartment List” reports that in February, the vacancy rates for rental homes in Southern California were as follows: San Diego County 5.88%, Los Angeles County 4.87%, Ventura County 4.96%, San Bernardino County 3.68%, Orange County 5.58%, and Riverside County 4.78%.
Looking at individual cities, Pasadena had a vacancy rate of only 3.7% in February, tying with San Francisco for the second lowest among 149 cities in the U.S. monthly rent report. In December last year before the Los Angeles fires, the city’s vacancy rate was 4.9%. New York City has the lowest vacancy rate in the U.S. at 3.2%.
An analysis released by the UCLA Anderson Forecast Center this month reveals that wildfires have made the rental housing market in the Los Angeles area increasingly unaffordable. The fires destroyed over 16,251 buildings, including 12,585 homes. Over the past decade, Los Angeles County issued approximately 20,000 to 25,000 new housing permits annually, but the fires have resulted in a 2/3 to 3/4 loss in annual new housing supply. The report suggests that the reduced rental housing supply in fire-affected areas may lead to increased demand in the short term, further exacerbating Los Angeles’ already severe housing shortage issue.